Publications

Rapport de recherche

• With business innovation a key to improving productivity and prosperity, Canada’s underperformance in this area is a cause for concern. This Commentary explores how businesses respond to obstacles to innovation and how public policy can best support their efforts in a period of turmoil.

• This research makes two primary contributions. First, it provides novel empirical evidence on how firms actively respond to and mitigate innovation obstacles through various strategies while facing financial constraints. Second, it offers the first systematic assessment of government support programs’ effectiveness in addressing specific innovation barriers within the context of firm-level mitigation efforts.

• Firms that actively address innovation barriers – especially financial ones such as lack of capital – through government support programs or internal strategies show higher innovation rates, though financial constraints remain a persistent, partially unresolvable obstacle.

• Government support programs are most effective when combined with firms’ own efforts and show strong results for financial and market-related barriers, but less so for skill and regulatory challenges, highlighting the need for more targeted and diversified policy tools.

Beaudry, C. (2025). Unleashing Innovation: Barriers, Government Support Programs, and What Works Best. Commenraire no 689. Toronto: C.D. Howe Institute. 29 pages.